Author: TNN
Publication: The Economic Times
Date: January 7, 2008
URL: http://economictimes.indiatimes.com/News/News_By_Industry/Dredging_projects_remain_on_paper_despite_plan_support/articleshow/2679335.cms
Dredging sector seems to have received the
least attention during the 10th Five Year Plan period as none of the major
port deepening projects envisaged for the time frame has taken off. Quite
oblivious of the reality, the present 11th 5-Year Plan (2007-12) plan document
talks eloquently of the need for 'substantial capacity augmentation at major
and minor ports'.
"Keeping in view the present trend, it
is estimated that the Indian ports will have to handle cargo traffic of about
800 million tonnes (MT) by 2012 as compared to 520 MT handled in 2004-05,"
noted the document, before adding, "This would require substantial capacity
augmentation at major and minor ports. A deep sea port will be developed and
drafts of existing ports will be deepened, where feasible, through capital
dredging."
According to both local as well as foreign
dredging company professionals, none of the deepening projects of the last
Five Year plan has been taken up for execution. "Dredging works at places
like Kolkata, Haldia were going on for the last so many years, but most of
the dredging plans of almost all major ports are still at the bidding stage,"
said an executive of a dredging major, who do not want to be named.
For example, like many other port projects,
Jawaharlal Nehru Port channel dredging project has been hanging fire for quite
some time. According to sources, today the primary reason is said to be the
dredging cost which has gone up substantially over last 1-2 years, while the
government estimates have been much below. While everyone rues the undue delay
in clearing dredging project proposals, many of the port managements feel
that the shipping ministry's preoccupation with Sethusamudram project as the
cause for delay. "The ministry seems to force dredging companies to work
at Sethusamudram before taking up any other work," said a port official
on condition of anonymity.
Dredging company officials with whom ETSL
interacted denied any use of force, but conceded, "There is no pressure,
but the wishful thinking is that let somebody come and do it," said an
official. He clarified that companies are not in a position to work at Sethusamundram
as equipment offered earlier were now committed to other projects else where.
After the Sethusamudram came up and the way
it got stuck up, the ministry seems to have no time for other projects, he
said.
"Due to cost escalation and huge demand
there is an upward revision in project costs which has to be approved by the
planning commission. Due to this, if not all, many of the project proposals
are at the revision stage," said T Vijaymurthy, director of Van Oord
india, one of the leading dredging companies in India.
"Trade is suffering hugely," said another executive, "because
of the delay and the kind of benefit that ports could have enjoyed has not
materialized."
However, no dredging company is sitting idle
and complaining. "Every dredging company, even those that have came into
the sector without knowing anything is quite busy," said a dredging contractor.
All private ports are taking off pretty well with lethargy of the government
and the ports it supposed to be managing, he added.
Mohanlal Kewalramani of Jaisu Shipping, said, "We have dredging work
pending in India worth more than Rs 5000 crore and our capacity is only about
Rs 1000 crore."
Mr Kewalramani said that tonnage tax regime
has helped dredging companies to purchase new dredgers. Even though there
are many new companies which have joined the sector, it would not mean Indian
dredging gathering more muscle, believes Mr Kewalramani.
According to him, unless India changes the
policy environment to help local dredgers, these new companies will die a
natural death.
Though there are many people coming into the
sector they are not dredging companies but only owners who bought dredgers.
"Dredging work is not done on the basis of ownership. It is contract
work and not chartering like in shipping," he said.
According to him, the system of bidding is
heavily loaded against local operators. The issue is that their qualification
system is wrong. The bidding document says a company should have done a particular
value of work, which is very hypothetical. It should have been the quantity
of work that had been executed.
He also allege that the bidding processes
are not getting over because of the existence of a cartel in the sector.
